MW High Tech Projects UK Ltd v Haase Environmental Consulting Gmbh
| Jurisdiction | England & Wales |
| Judge | The Honourable Mr. Justice Coulson,The Hon. Mr Justice Coulson |
| Judgment Date | 03 February 2015 |
| Neutral Citation | [2015] EWHC 152 (TCC) |
| Docket Number | Case No: HT-14-266 |
| Court | Queen's Bench Division (Technology and Construction Court) |
| Date | 03 February 2015 |
[2015] EWHC 152 (TCC)
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
TECHNOLOGY AND CONSTRUCTION COURT
Royal Courts of Justice
Strand, London, WC2A 2LL
The Honourable Mr. Justice Coulson
Case No: HT-14-266
Mr Vincent Moran QC (instructed by Clarke Wilmott LLP) for the Claimant
Mr James Bowling (instructed by BLD) for the Defendant
Hearing date: 15 January 2015
Approved Judgment
I direct that pursuant to CPR PD 39A para 6.1 no official shorthand note shall be taken of this Judgment and that copies of this version as handed down may be treated as authentic.
INTRODUCTION
In these proceedings, which were commenced on 12 August 2014, the claimant ("MW") seeks declarations as to the proper construction of their contract with the defendant ("HEC"), pursuant to which MW appointed HEC to develop and complete the design of the process engineering elements of a waste energy plant at Brookhurst Wood Landfill site, Horsham, in West Sussex ("the site"). There has already been one adjudication between the parties in which, on MW's case, the adjudicator failed correctly to construe the relevant terms of the contract (which I shall call "the Appointment"). MW say that they have further claims against HEC, which involve many millions of pounds, and that it would be helpful for the court to grant declarations as to the proper construction of the Appointment.
HEC deny that the declarations sought would be of any utility to the parties. Furthermore, although they acknowledge that, in at least one respect, the adjudicator erred in his reasoning, they submit that he got to the right answer. They also say that that part of his reasoning, with which MW now take issue, is not binding on any subsequent adjudicator.
I propose to set out the contractual chain and then to identify the essential dispute between these parties. Thereafter, I set out (regrettably, at some length) the express terms of the Appointment. Then, having dealt with both the past adjudication and the future claims I deal, at Section 7 below, with the issue as to whether or not it would be appropriate of the court to grant declaratory relief. Then at Section 8, I discuss in detail the nature, scope and extent of HEC's principal obligations, and explain how they dovetail one with another. At Section 9, I identify the declaration, in outline only, which I consider appropriate.
THE CONTRACTUAL CHAIN
By a Materials Resource Management Contract, dated 28 June 2010, West Sussex County Council engaged Biffa Waste to design, build and operate a recycling facility at the site. One of the particular features of the completed project was that it would, through a process of anaerobic digestion, turn biodegradable waste into methane gas which would not only run the site but would also be utilised for export.
Biffa in turn contracted the design and construction of the waste treatment plant at the site to MW. This was known as the EPC contract and was dated 28 June 2010. The contract sum was just under £100 million. The works should have been complete by 10 January 2013. As a result of numerous delays, this date was not achieved, and the EPC contract was terminated on 6 December 2014.
Prior to the EPC contract being entered into, MW appointed HEC, pursuant to a letter of intent, to provide design services, including the design of the anaerobic digestion process. These are referred to in the documents as the process engineering services. Pursuant to the work done under the letter of intent, HEC completed a Basic Design Proposal which included (amongst other things) the EPC Delivery Plan. This was subsequently incorporated into the contracts referred to at paragraphs 4 and 5 above.
On 12 July 2010, MW appointed HEC to act as consultants. The work done under the letter of intent was subsumed into the Appointment. The express terms of the Appointment lie at the heart of this application. A full description of the background to the Appointment, and an outline of the contents of all the relevant documents that formed part of the Appointment, can be found in the agreed List of Relevant Facts, completed by the parties and attached to this Judgment as Appendix 1. I analyse some of the express terms of the Appointment in Section 4 below.
THE ESSENTIAL DISPUTE BETWEEN THE PARTIES
Before turning to the terms of the Appointment in detail, it is sensible to outline in brief terms the essential dispute between the parties. This is the dispute that arose in the original adjudication, and was the dispute that was then outlined to me, with commendable clarity, by both counsel during the hearing.
MW say that they based their tender to Biffa on the Basic Design Proposal prepared by HEC. They say that, within 12 days of the entering into the Appointment, they found that HEC were proposing design changes/enhancements, which made the overall cost of the works much higher. MW say that this process (of design changes and increased cost) then continued throughout the life of the project. MW say that many of the changes/enhancements which were proposed did not comply with the Appointment because HEC could have complied with their contractual obligations (both to take reasonable care and to comply with certain specific requirements, including the EPC Output Specification and the EPC Delivery Plan) without making these changes/enhancements. Instead they say that the changes meant that, although HEC may have complied with the obligation to take reasonable skill and care, they failed to comply with their obligations to comply with the EPC Output Specification and the EPC Delivery Plan. Thus MW say that HEC are liable to them for the costs of the changes/enhancements which did not comply with those specific documents/requirements.
HEC say that that is an incorrect construction of the Appointment, and that if the eventual developed/modified design was non-negligent, there could be no breach of contract on their part. They argue they were not obliged to stick rigidly to the Basic Design Proposal in circumstances where their professional advice was that there was a non-negligent modification of the design that was appropriate in all the circumstances. They also say that the terms of the Appointment envisaged design development and changes, and that MW's claims therefore fall to be considered by reference to the detailed provisions dealing with discrepancies, changes, comments and approvals on the ongoing design process.
In essence, the dispute concerns which of the parties bore the contractual risk of increased costs associated with what might be called the enhancement of the design beyond the parameters set out in the EPC Delivery Plan. Both parties accept that the starting point is HEC's obligation to act with reasonable skill and care, but MW say that, pursuant to the obligation to comply with the EPC Delivery Plan and the EPC Output Specification, if two non-negligent design solutions were available, and one was in accordance with the basic design as set out in those documents, and the other was an enhancement of it, HEC was either obliged to adopt the former or were liable for the costs consequences of adopting the latter. HEC say that they were not so fettered and that, provided that they complied with the regime concerned with design approvals and changes, the risk of additional costs being incurred as a result of design enhancements rested fairly and squarely with MW.
THE APPOINTMENT
The scope of the services to be provided by HEC was outlined in Schedule 11 of the Contract. The relevant part of that Schedule provided as follows:
" THE CONSULTANT Scope Of Works
Design Requirement
1. Produce all Process and Instrumentation Diagrams (PID's) and Process Flow Diagrams (PFD's) taking into account and integrating the PIDs of Eggersmann.
2. Produce the Mass and Energy Balance, taking into account and integrating the mass and energy balances of Eggersmann, including the process fluid physical properties.
3. Produce detailed specifications for packages and supplier list, identifying names of recommended suppliers, and identifying those that are single source.
4. Review and approve, any changes made to the above specifications by the Contractor.
5. Produce all General Arrangements (GA) drawings, including the review and verification of Eggersmann Design.
6. All drawings, specifications and calculations to undergo a complete HAZOP and FMEA review prior to "sign off". Any identified issues to be incorporated into the Consultant's design prior to reissue to the Contractor. HAZOP and FMEA are under the responsibility of the Contractor. The Consultant will provide reasonable assistance and support the Contractor.
7. Produce the overall Operating and Maintenance Manuals and As Built drawings, associated with the Consultant's scope of works in accordance with the Appointment. The suppliers shall be responsible for their specific O&M. however the overall process will be managed by the Consultant.
Further requirements.
1. Gas production / quality to be sufficient to operate the CHP engines, and in accordance with the manufacturers requirements.
2. De watered digestate to be in accordance with Schedule 16.
3. Effluent water production / quality to be in accordance with Schedule 16.
4. Utility consumption to be in accordance with Schedule 16.
5. Compliance with EPC Output Specification and EPC Delivery Plan."
Turning to the Appointment itself, clause 3 was a collection of somewhat miscellaneous obligations under the heading 'Continuation of Obligations and Project Documents'. These included:
"3.2 The Consultant acknowledges that it has received and familiarised itself with copies of the EPC...
To continue reading
Request your trial
-
Audrey Bernard-Kilbourne v Board of Management of Maldon Primary School
...no opportunity for further assessments the declarations would be pointless. Counsel relied on the authority of MW High Tech Projects UK Ltd v Haase Environmental Consulting Gmbh [2015] EWHC 152 (TCC), [32–33] for the principle that declaratory relief should only be granted if it would serve......
-
MT HØJGAARD A//S v E.ON Climate and Renewables UK EWCA CIV 407: Fitness for purpose
...meaning. See the note on Arnold and Britton [2015] UKSC 36 above 152 MW High Tech Projects v Haase Environmental Consulting [2015] EWHC 152 (TCC) The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific...
-
Table of cases
...Ltd [2015] EWHC 949 (TCC) II.12.56, II.12.74, II.13.132, II.13.142 MW High Tech Projects UK Ltd v Haase Environmental Consulting GmbH [2015] EWHC 152 (TCC) II.10.129, III.15.32, III.24.30, III.24.133, III.26.144 Myers v Sarl (1860) 3 El & El 306 [121 ER 457] I.3.166, I.3.186 cccxix TaBLE OF......
-
Statutory adjudication
...BLR 210 at 220 [32], per Akenhead J. 207 See, in this regard, MW High Tech Projects UK Ltd v Haase Environmental Consulting GmbH [2015] EWHC 152 (TCC) at [32]–[43], per Coulson J. 208 AECOM Design Build Ltd v Staptina Engineering Services Ltd [2017] EWHC 723 (TCC) at [21], per Fraser J. 209......
-
Litigation
...v Robinson & Co (Singapore) Pte Ltd [2014] SGCA 43 at [43]; MW High Tech Projects UK Ltd v Haase Environmental Consulting GmbH [2015] EWHC 152 (TCC) at [32]–[34], per Coulson J; BHC Ltd v Galliford Try Infrastructure Ltd [2018] EWHC 368 (TCC) at [46]–[47], per O’Farrell J. As to declaration......
-
Negligence
...London Underground Ltd v Kenchington Ford plc (1998) 63 Con Lr 1; MW High Tech Projects UK Ltd v Haase Environmental Consulting GmbH [2015] EWhC 152 (TCC). 414 Compare Rickard Constructions Pty Ltd v Rickard Hails Moretti Pty Ltd [2006] NSWCa 356 at [137]–[138], per Giles Ja. 415 Holland Ha......